Designing for Future Life Events — Insurance and Pension Services

Raised eyebrows and skeptical looks are the first reactions when I talk about how fascinating it is to work in the insurance business. However, thinking about why people buy insurance quickly brings you to realise that insurance is for the things you really care about — your car, your health, your family, your future. The researcher in me enjoys the meaningful conversations I have with research participants not only about the wishes and dreams they have for their future, but also their fears and the setbacks they’ve experienced in their lives. The service designer in me gets excited to bridge these very emotional topics with a very rational product — something that is based on highly complex math and tons of juristic text. The way insurances work, combined with the nature of the user mindset, is a true challenge for service designers. Crafting delight requires a different approach because some principles that apply to many other industries have a different meaning for insurance and pension services.

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Triggers — ‘NOTHING’S GOING TO HAPPEN ANYWAYS’

Customers usually react to a trigger, as in many cases, products and services are available to purchase right in the moment where and when they are needed — gas stations close to highway, heart-shaped chocolates around Valentine’s day. With insurance however, this is different: In the moment when people really realise the need for it, it’s already too late to buy the product and solve the problem at hand.

Tangibility — ‘THE WORST THING ABOUT A CAR IS THE COST YOU DON’T BENEFIT FROM’

In order to design for car insurance, we talked to customers about their car and found out that many feel they are paying a lot and receiving very little — insurance was one example. This is true in the way that insurance is not a tangible thing that can be owned, and its service is experienced only on very rare occasions, if ever. Insurance is a most virtual product — it’s a promise. And on top of that, unlike products you purchase and look forward using, insurance is a promise that you hope you won’t ever have to make use of. This adds to the hesitation for people to enter an insurance contract.

Value proposition — ‘MY PENSION IS SO FAR AWAY, THAT I’D RATHER SPEND ON MY LIFE TODAY’

Having to convey the value of insurance to a person who hasn’t experienced such a moment of need requires yet another knack. In short, you’re not buying insurance for yourself, you have to think about the future you — and imagining who this person is and what this person needs can be very difficult. The further you try to think into the future, say, when talking to a young professional about pension plans, the harder it becomes. For many of our participants, it’s a lot more intuitive to buy something they can enjoy now — for example a motorcycle or a new TV — than taking that money and investing it into their retirement. The challenge is to create sympathy for the future ‘you’ and thus anticipate future needs.

Touch points — ‘I CAN’T AND DON’T WANT TO THINK ABOUT THE EVENT OF DAMAGE’

Across all different classes of insurance, we learned that customers really don’t want to think about what can go wrong — having a car accident, a house fire, or the passing of a beloved. In fact, customers buy insurance to not have to worry about any of those things. The yearly bill is a reminder of what the customer is trying to avoid — and so becomes any other interaction with the insurer. Bain & Company discovered, however that the more touch points an insurer has with their customers, the higher the customer loyalty scores (such as the net promoter score) are. This creates the dilemma, and simply increasing the frequency of interaction with the insurance won’t solve the problem.

Target groups — ’I REALLY DON’T WANT ANYTHING I DON’T NEED’

Design methods deliver the best output if the target group is clearly defined — and they are even more effective if you can fully customise the offerings. Unfortunately, customisation and personalisation contradict the very nature of insurance. If you’d only insure the risk that you are certain to have, your premium will be extremely high. This is because insurance can only work if risk is distributed over a large and diverse group of people — it works if „everybody“ has insurance. Insurance is about a community — the group mitigates the risk of each individual.

Delight — ‘INSURANCES SHOULD BE SERIOUS AND HELP ME’

On many projects, we are asked to find ways to make insurance “cool”. But when we look at what the moment of truth for insurance is — the claim — it’s comprehensible why it can’t quite work this way. Reasons for claims are uncomfortable to say the least, if not truly tragic — what is needed here is not “delight” but help. In such a moment of distress, you need the insurer to take you seriously. In this context, delivering value means an empathic tone of voice, taking work off customers’ shoulders and supporting them to bring life back onto its tracks.

For me, the fascination of working in the insurance industry is defined by its hurdles. Not all rules, that we take for granted of a state-of-the-art customer experience today, apply. The very infrequent customer interactions and even fewer moments of truth with a complex and intangible product that you probably don’t realise you need, make designing digital services a special challenge that Kaiser X Labs is motivated to meet.

Karolina is Lead Design Researcher. She helps shaping early-phase projects based on customer insights. The most exciting phase in a project for her is to translate diverse customer voices into business opportunities. Karolina has degrees in Communication Design, Design Research and Strategy and is a Fulbright alumnus.

References:

https://www.bain.com/insights/customer-behavior-loyalty-in-insurance-global-2017/ Figure 2